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Sunday, December 19, 1999
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Delhi to face power crisis: Minister
CHANDIGARH, Dec 18 — Delhi will face extremely acute power shortages this summer, said Mr P.R. Kumaramangalam, Minister of Power, Government of India, at the Valedictory Session of Infranet ‘99, organised by CII (Northern Region) and being held in Delhi from December 16 to 18, 1999.

Reform process to continue
NEW DELHI, Dec 18 — The Union Finance and Revenue Secretary, Mr P.G. Mankad has said the reform process and rationalisation will continue and it will be further accelerated to face the challenges of globalisation.


NEW DELHI: Prime Minister Atal Behari Vajpayee with Finance Minister Yashwant Sinha, Assocham President K. P. Singh and Dr Raj Reddy, Adviser, Information Technology, to the US Pesident, at the inaugural session of the 79th annual meeting of Assocham in New Delhi on Saturday. — PTI photo

‘Book defaulting industrialists’
CHANDIGARH, Dec 18 — Employees of three commercial banks here held a demonstration today in front of the head office of the CII to protest against the suggestion forwarded by CII to close weak banks.
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BoP to introduce Internet banking
CHANDIGARH, Dec 18 — Bank of Punjab is introducing online internet banking and is creating the required infrastructure for offering Internet enabled banking services for business-to-business and business-to-customer e-commerce. They will introduce digital signatures and smart cards in collaboration with a renowned UK based company using PKI Technology.


Tax and you

labour law

Sales tax

Grape vine

Ease provisions of new Act
By P.D. Sharma
THE Punjab Municipal Act, 1999, has been enacted to replace the Punjab Municipal Act, 1911; the Punjab Municipal Corporation Act, 1976, and the Punjab Executive Act. It is with the President of India for his assent. The provisions in the Act are harsh and impractical to implement and contain ample scope for prosecution covering all sections of population.

Gestetner enters SOHO segment
CHANDIGARH, Dec 18 — Gestetner India Ltd, today launched Gestetner Radius 145, a state of the art laser printer-cum-digital copier-cum-scanner, all in one amazingly compact user friendly unit. Keeping with Gestenter’s vision of office automation products for the new millennium, the Radius is the first multifunctional high-technology machine and also features an optical character recognition facility in the scanner unit.

Analyst’s diary
Hind Lever may issue Y2K bonus

LAST week, I signed off promising to provide some dope on Peerless Shipping a seemingly innocuous company which would have, in normal circumstances failed to enthuse investors. However, it has, and so much so that a BSE broker is reportedly on record predicting that its share price will touch Rs 1,000 before the year Y2K is out.
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Delhi to face power crisis: Minister
Tribune News Service

CHANDIGARH, Dec 18 — Delhi will face extremely acute power shortages this summer, said Mr P.R. Kumaramangalam, Minister of Power, Government of India, at the Valedictory Session of Infranet ‘99, organised by CII (Northern Region) and being held in Delhi from December 16 to 18, 1999.

Mr Kumaramangalam said the “theft network”, which he described as being “very well set-up” was to blame quite substantially. However, slums accounted for a very small percentage of total transmission and distribution losses, pointed out Mr Kumaramangalam saying that power could only be effectively stolen by those who could afford the necessary expensive equipment. Privatisation of power distribution networks was a very important step that needed to be taken said Mr Kumaramangalam, but this could never happen unless leakages from the system could be plugged.

In a poor country, subsidies for infrastructure services could not be done away with, Mr Kumaramangalam further said. For example, if full tolls were charged on all highways, then only 10 per cent of the population could use highways. Probably only those who received free power for agricultural purposes could afford to pay economic costs, he added.

Neither the Indian policies nor the documentation was fully-equipped for facilitation of private sector participation in infrastructure, Mr Kumaramangalam stated, except may be for the power sector which had 10 years of learning e.g. most infrastructure sectors, except power, do not even have a model agreement in place, he said. Mr Kumaramangalam invited the private sector to draw up model documentation agreements, risk-sharing terms etc for all infrastructure sectors, and present it to the Government. He stressed on the importance of providing for risk insurance for infrastructure projects.

Mr Kumaramangalam also spoke of the importance of “securitising” regulators, saying that giving them for autonomy meant that they could not be threatened with firing when decisions were not popular.

Mr Vinayak Chatterjee, Deputy Chairman, CII (Northern Region), presented the key recommendations of the conference. They were:

* Time bound implementation plans and appropriate machinery for monitoring of projects, as well as improvement in the pace of implementation.

* Creation and strengthening of autonomous regulatory bodies through legislative changes to define their powers, formulation of ways to make them financially independent and staffing by top professionals.

* Progress to cost-based user charges. A political process to achieve consensus on this issue must be initiated at the highest level.

* Formulation of innovative public private partnership models, and model legislation for Build-Own-Transfer projects and concessions.

* Development of institutional arrangements like project development companies, initiative funds etc to assume development risks.

* Appropriate risk-sharing arrangements, focussed on allocating risks to the party best equipped to assume risk.

* Dr Rakesh Mohan, Director General, NCAER, said that the fiscal situation of State and Central Governments had severely constrained public investment in infrastructure. Further, regulatory bodies could not be independent until they were financially autonomous and could thus hire top professionals. On the recommendations put forward during the conference, he said that once the first three were achieved, the next three would be easily achieved.

Mr Sunil Kant Munjal, Chairman, CII (Northern Region), said that infrastructure is an area where India must get its act together in terms of getting projects with short gestation periods off the ground.Top

 

Reform process to continue
Tribune News Service

NEW DELHI, Dec 18 — The Union Finance and Revenue Secretary, Mr P.G. Mankad has said the reform process and rationalisation will continue and it will be further accelerated to face the challenges of globalisation.

Addressing an interactive session with the chiefs of term lending institutions and corporate borrowers at the PHDCCI here, Mankad said the reform process will unshackle the trade and indsutry as also financial institutions and make them sensitive to each others problems as they are inter-dependent.

The Finance Secretary urged the trade and industry to have introspection at their business environment, restructuring and improvement in the quality of their products.

“Unless quality is improved to face competition onslaught, no amount of concessions and incentives will be of much help. They can only be short term palliatives”, he said.

At the same time, he urged the financial institutions to do a mid-course correction, bring about structural changes and revamping in their procedures, work culture and their mindset so as to be responsive to the requirements of trade and industry.

The meeting was also addressed by the CMD of IDBI, Mr G.P. Gupta, the CMD of IFCI, Mr P.V. Narasimham and the MD of TFCI, Mr M. Narayanan.

The president of PHDCCI, Mr Ashok Khanna said FIs should reduce lending cost by mobilising low cost funds from domestic and foreign markets like innovative debt and bond instruments and tap provident fund, pension funds and arrange forex lines credit, provide swapping facility of high cost rupee loans into low cost dollar funds.Top

 

Book defaulting industrialists’
Tribune News Service

CHANDIGARH, Dec 18 — Employees of three commercial banks including Indian Bank, United Commercial Bank and United Bank here today held a demonstration in front of the head office of the CII to protest against the suggestion forwarded by CII to close weak banks.

Employees and their leaders raised slogans against CII and its members and urged to withdraw the suggestion.

Mr Vijay Sharma, Mr Balkaran Singh, Mr P.K. Gulati and other leaders addressing the participants in the dharna alleged that in fact a large number of industrialists have been responsible for making the banks weak.

Mr Vijay Sharma urged the Union Finance Minister, Mr Yashwant Sinha to do away the Banks Secrets Act and publish the names of all the defaulter industrialists against whom dues worth several hundred crores of banks were pending for the past many years.

He said that criminal cases should be registered against the defaulter industrialists and they should be made to return money of banks. He said that the Union Government should follow the example of neighbouring country which had launched a special campaign for the recovery of dues from industrialists.

Mr Vijay Sharma said that about Rs 51,000 crore were due against industrialists and banks under pressure from the authorities concerned had declared this amount as Non-Performing assets. He said that with the recovery of NPA from undustrialists, the banking industry in the country would become a most profit earning and efficient sector in the country.

Mr Sharma said that all defaulter industrialists should be blacklisted and no loan should be advanced to their firms by commercial and private banks.Top

 

BoP to introduce Internet banking
Tribune News Service

CHANDIGARH, Dec 18 — Bank of Punjab is introducing online internet banking and is creating the required infrastructure for offering Internet enabled banking services for business-to-business and business-to-customer e-commerce. They will introduce digital signatures and smart cards in collaboration with a renowned UK based company using PKI Technology.

To offer value added services to clients, the bank is setting up three interconnected “Call centres” at Chandigarh, Delhi and Mumbai, thus offering round-the-clock banking convenience to the customers for telebanking, faxbanking and electronic fund transfer.

The bank is currently working on a strategic tie up subject to RBI approval for entering into the insurance sector which is presently in the process of being opened-up to the private sector. With this the bank would be offering an array of Life and General Insurance products to its customers through its extensive branch and off-site distribution network.

The bank is among the first to be Y2K compliant and is using bancs 2,000 software from Infosys and has been certified Y2K compliant by external auditors M/s SQL Star International.

The bank has deposit base of over Rs 1,900 crore and an overall business of Rs 2,900 crore with 52 banking offices spread across 25 cities and seven states.

On a query by Bombay Stock Exchange, pursuant to a newspaper article regarding Bank of Punjab, the bank has informed the Stock Exchanges that any proposal or any strategic/synergistic tie-up that the bank may seek or be offered with any other bank/FI/multilateral agency/insurance company etc would necessarily require consideration and approval by the Board of Directors of the bank and as is required in such cases, the bank would send prior intimation to the stock exchanges if and when a board meeting is convened for considering any such proposal.Top

 

Ease provisions of new Act
By P.D. Sharma

THE Punjab Municipal Act, 1999, has been enacted to replace the Punjab Municipal Act, 1911; the Punjab Municipal Corporation Act, 1976, and the Punjab Executive Act. It is with the President of India for his assent. The provisions in the Act are harsh and impractical to implement and contain ample scope for prosecution covering all sections of population. Only recently the Punjab Government had to withdraw provisions of prosecution in the Sales Tax Act under strong protest from industry. It is an irony that the same Government is providing for prosecution as if with vengeance.

Before detailing the provisions of this Act little clarification on PSEB’s version is essential. Last week these columns opposed the move of the PSEB to raise security from consumers to three times. The PSEB issued clarification that it has not done anything of this sort. In this regard the PSEB should read its abridged conditions of supply at Sr Nos 8.8 to 8.10. Its auditors pointed this out to the operational staff and the Jalandhar circle initiated action. The Chairman, PSEB, took immediate notice of this and put a stop to the action initiated.

The new Municipal Act provides for prosecution for various offences which otherwise are normal lapses. Sinking of tubewell without permission attracts a penalty of Rs 10,000 or three months’ imprisonment or both. Industry has to depend on its own source of water as municipal water is uncertain and inadequate.

Illegal discharge of trade effluent by an owner attracts penalty of Rs 10,000 or three months’ imprisonment or both. So industry will be at the mercy of the municipal staff. Connection of water pipes/sewers with the municipal water works or drains without permission carries a fine of Rs 10,000 or one year’s imprisonment or both.

The opening of shop without licence attracts a fine of Rs 10,000 or three months’ imprisonment or both. In large cities every street has small shops. It is not understandable as to how the Municipal Corporation will deal with this situation when such shops have been allowed over decades.

Failure to provide urinal in the factories attracts a fine of Rs 10,000 plus Rs 1000 a day. This matter falls under the labour department and this overlapping is hardly desired.

House Tax rates for the industry have been revised from 5 per cent to 10 per cent of the market value of the property and it can be revised after every five years. Earlier Act did not provide for revision. The licence fee for the industry has been raised from Rs 500 to Rs 25,000 per year.

If any goods carrier unintentationally crosses octroi barrier by mistake penalty of 20 times the normal rate is impossible. Earlier commissioner could compound the amount. Now this discretion has been curtailed to a minimum penalty of 10 times. Similarly minor lapse in transit (Rah Dari) through the city attracts a fine of Rs 20 times the normal rate against Rs 20 only in the old Act.

The Act provided for penalty to the maximum extent of Rs 500. Under the new provisions the Municipal Corporation has taken control of almost all activities of industry and trade. This is hardly justified by any standard. Financial burden of taxes is such that the industry cannot run with these provisions. Imprisonment part of the penalty hardly needs any comment.

The Government should withhold the enforcement of the Act and have dialogue with all sections of propulation. Already octroi rates have been revised by more than 100 per cent against the promise of abolishing of octroi.Top

 

Gestetner enters SOHO segment
Tribune News Service

CHANDIGARH, Dec 18 — Gestetner India Ltd, today launched Gestetner Radius 145, a state of the art laser printer-cum-digital copier-cum-scanner, all in one amazingly compact user friendly unit. Keeping with Gestenter’s vision of office automation products for the new millennium, the Radius is the first multifunctional high-technology machine and also features an optical character recognition facility in the scanner unit.

Mr Paul Wilkinson, Managing Director, Gestetner India Limited said, “Radius is a state of the art multi-functional product that will redefine the standards of office automation efficiency. We recognised the growing need for efficient multifunctional office automation products among small business houses, professionals and entrepreneurs who cannot afford to block their capital and space on three separate machines — Radius is an answer to the needs of this huge segment. He said it will top in the small office home office (SOHO) segment.

Mr Wilkimson said the company is planning an aggressive marketing strategy to tap the potential in the SOHO segment in India. As part of its marketing and customer service efforts the company is in the process of setting up an extensive dealer network across the country. This will further complement its existing specialised sales and service teams at its 37 branch offices around India.

Gestetner India Ltd a 51 per cent owned subsidiary of Gestetner Holdings. The company is a leading player in the office automation industry, offering a complete range of Copy Printers, Duplicators and Digital Copiers. The company has achieved a sales turnover of Rs 62 crore during 1998.Top

 

Analyst’s diary
by Ashok Kumar
Hind Lever may issue Y2K bonus

LAST week, I signed off promising to provide some dope on Peerless Shipping a seemingly innocuous company which would have, in normal circumstances failed to enthuse investors. However, it has, and so much so that a BSE broker is reportedly on record predicting that its share price will touch Rs 1,000 before the year Y2K is out. So, what’s cooking here? For starters, the company is to be renamed Coflexip Stena to reflect the change in controlling stake in favour of the MNC Coflexip Stena offshore, which is a global giant in sub-sea field development, operations and services. Of course, this development merits a re-rating of the company, but remember, its price has already ascended from a lowly Rs 6 a little more than a year ago to Rs 200 plus. Well, what’s really driving the price is the hitherto unsubstantiated rumour doing the rounds that a Bombay based financial wizard, who cannot be named for obvious reasons, has been appointed the international advisor of the group and that an NYSE listing figures in the game-plan. Again, this is conjecture, and there have been cases in the past when deals have fallen through resulting in a hurried decline of share prices. So, that then is the Peerless story as it stands.

When the share price of Hindustan Lever dipped below the Rs 2,300 level recently, that is, less than a month ago, we had cried ourselves hoarse in our Investment Newsletter that this is too good a company to deserve such a sharp price decline. Agreed, the last quarter was not exactly a bumper one, but just take a look at its brand equity and one would be convinced that this scrip merits a far higher rating than it has been accorded. Expectedly, its share price has bounced back and those who had seen the opportunity when it arose less than a month ago would be laughing their way to the bank right now. Furthermore, the grapevine has it that HLL may declare a Y2K bonus. Again, while this is pure conjecture, the fact remains that this mother of all MNCs in India does have the fire-power in its reserves to declare a bonus.

Take the case of the forthcoming issue of Zenith Infotech. Apparently miffed by the rejection of their request for firm allotment a cartel of BSE brokers have been badmouthing the issue saying it is overpriced. While I am yet to analyse this issue and hence unable to pass judgement on its pricing at this moment, it is quite evident that unlike many of the ‘johnnies come of late’ who are recent converts from various sectors and more particularly the finance sector to the thriving Information Technology sector, Zenith already has an established brand name which provides it greater leverage. Or is the badmouthing a ruse on part of the broking fraternity to scare away some prospective investors away so as to improve their own chances of allotment.

CNBC has recently launched a real-time programme based on the Indian markets named ‘Bazaar’, which is fairly informative and very impressive. The show anchors, Senthil and Shailendra are very savvy and in my opinion compare very favourably with their contemporaries in the same channel who cover other Asian markets. With intellectual capital becoming the crux in today’s information technology driven world, it is my personal belief that in the first quarter of the next century India will be in the forefront of the global economy. Of course, for that to happen our political fraternity too has to play ball. Now, isn’t that asking for a bit too much especially given that India seems ill-fated to go down in history as possibly the last nation where the Commie bastion crumbled? Not necessarily, if you consider that two of the southern states where much of the IT action is taking place have technosavvy Chief Ministers.Top

 

Checkout
by Pushpa Girimaji
Ask for amendments to
Hire Purchase Act

AFTER 28 years, yet another attempt is to resurrect the Hire Purchase Act of 1972. But whether the law meant to protect the interests of consumers in hire-purchase transactions will eventually see the light of the day depends on the consumers’ power to lobby for their rights. And lobby they must because at no time was this law as important as it is now.

These days, from plots and houses to tractors, cars and household goods almost everything is available on credit, providing consumer the option to pay for the goods in monthly instalments. However, in the absence of a law to regulate such transactions, consumers often get an unfair deal. This is particularly so in the automobile sector. The rate of interest, for example, may turn out to be far higher than agreed upon, there may be several hidden costs, the agreement may contain clauses that go against consumer, the interest may not be calculated on reducing balance amount, and worse, the financier may seize the goods for non-payment of even one instalment and without even a notice to the hirer. Unfortunately, even consumer courts have not come to the rescue of consumers in such cases, making it all the more necessary for consumers to have a separate law for their protection.

But why should there be a sustained consumer campaign for the government to bring in the law? Well, a brief background on the subject is certainly in order. The history of the Hire Purchase law goes back to the time when the Law Commission of India recommended in 1961, a law to ensure fairness in hire purchase transactions. After about a decade, Parliament passed the Hire Purchase Act, 1972. The Government notification that followed said the law would come into effect from June, 1973. However, following objections from hire-purchase companies, this was postponed to September, 1973, through a fresh notification. Yet another notification rescinded the operation of the Act following the opinion of the Joint Committee of Parliament that there were certain anomalies in the law. And that was the last one heard of it for the next 14 years.

Then in 1987, following petitions submitted by consumer groups, the Petitions Committee of the Rajya Sabha took up the issue and called for early enactment of the law. After two years, an Amendment Bill to the Hire Purchase Act, 1972, was introduced in the Rajya Sabha. This time, the Chairperson referred the Amendment Bill to the Committee on Home Affairs, which, after seeking the opinion of the Law Ministry, suggested that in view of the developments in the area, it would be better to bring in a new law instead of an Amendment Bill. Besides, the provisions of the law needed to be simplified so as to be easily understood by consumers, the Committee felt. It therefore, suggested that the issue may be referred to the Law Commission for a fresh appraisal. The Law Commission, after seeking the views of various interested groups, including the Federation of All-India Hire Purchase Financiers has now submitted a comprehensive report suggesting amendments to the Hire Purchase Amendment Bill of 1989 as well as the Hire Purchase Act, 1972.

If the recommendations of the Law Commission are accepted by the Government, then we would have a law that would put a ceiling of 18 per cent on the interest charged by hire-purchase financiers, a specific formula to calculate the hire purchase price as well as the rebate that the consumer or the hirer would be entitled to on clearing the instalments early, besides certain restrictions on the owner or the financier re-possessing the goods.

As per the Law Commission’s proposal, the owner can seize the goods only if the hirer defaults more than once. Even here, the hirer must be served a notice informing him of the owner’s intention to terminate the agreement and giving him two weeks’ time to respond. If during this time, the hirer clears the arrears, than the owner cannot seize the goods. On the other hand, if the “statutory proportion” of the hire purchase price has already been paid by the hirer or the consumer, than the financier does not have the right to seize the goods except through a law suit.

And the statutory proportion is one half of the hire purchase price where the price is less than Rs 25,000 and three-fourths of the price where it is more than Rs 25,000. The term “hire purchase” includes agreements (a) where the purchase price or part of it is payable in instalments and (b) where goods are let on hire with an option to the hirer to purchase them.

It is now in the interest of consumers to write to the Centre, demanding amendments to the Hire Purchase Act of 1972, as suggested by the Law Commission and the enforcement of the law at the earliest.Top

 

Tax and you
by R. N. Lakhotia

Q: I am government pensioner. My regular pension for the Financial Year 1998-99 is less than Rs 1 lakh. But by adding arrears received on account of revision of pension w.e.f. 1.1.1996 it exceeds Rs 1 lakh. Kindly advise regarding Standard deduction, whether it will be Rs 25000 based on regular pension only or Rs 20,000 based on total amount received including arrears.

— Zorawar Singh, Chandigarh

A: On the facts stated by you by the standard deduction will get reduced to Rs 20,000 only specially because the total quantum of pension including the arrears of one accounting year exceeds Rs 1 lakh.

Q: Under the Income Tax Act rebate under Section 88 is available to whole of the GPF deposits till termination or retirement in all the State or private organisations.

However, in the State of Punjab there are instructions that GPF deductions should be stopped before six months from the date of retirement so that GPF amount could be conveniently disbursed on the date of retirement. But in some of the cases these GPF deductions are not stopped before six months of retirement and are continued till the date of retirement.

Kindly clarify whether in case of Punjab the rebate u/s 88 is available on the full amount of deduction of GPF till the date of retirement or only on the amount of deduction till six months before retirement.

— Nand Kishore, Panchkula

A: The tax rebate u/s 88 is available in respect of all the contributions or payments made by the assessee during the year. There is no restriction with regard to contributions made before 6 months from the date of retirement. However, you should ask your disbursement officer to take you through the rules and regulations of your GPF.

Q: The undersigned solicite your advice as to the nature and quantum of taxes leviable on donors and donees as a result of transaction for transfer of immovable property — done through a gift deed executed as per the provisions of Section 123 of the Transfer of Property Tax 1882.

— Darshan Singh, Amritsar

A: As per Section 123 of the transfer of Property Act for making a gift of immovable property, the transfer must be effected by a Registered Instrument signed by on or behalf of the donor and attested by at least two witnesses. With regard to the payment of Stamp Duty to be payable on such gift transactions of immovable property please remember that the stamp duty would be based on the market price of the property on the date of making the gift. However, the circle rate of the property would be the ideal answer for payment of stamp duty in respect of property to be gifted. You can also prepare a valuation report from the Government Approved Valuer to assess a fair market value of the property for payment of necessary stamp duty.

Q: Whether Dearness Allowance shall be included in salary or not for the purpose of exemption of HRA for Income Tax in terms of Clause (h) of Rule 2 of Part-A 4th Schedule of Income Tax Rules, 1962 in respect of a Haryana Government employee.

In this connection it is made clear that Dearness Allowance is being taken into account for gratuity and leave encashment on retirement. However, dearness allowance is not taken into account while calculating pension.

In view of the position kindly guide me whether DA shall be included in salary or not for the purpose of exemption of House Rent Allowance for Income Tax.

— Jagminder Aggarwal, Hisar

A: The Central Board of Direct Taxes vide Circular No 90 dated 26th June, 72 has clarified that the dearness pay is considered as pay for the purpose of pension and gratuity and compensatory allowances including house rent allowance, etc. in case of Central Government employees. It is, therefore, clarified that for the purpose of calculating the house rent allowance which would be exempt u/r 2A, this term salary includes Dearness Pay also. Thus for Central Government employees salary would include Dearness Allowances for the purposes of calculation of exemption or house rent allowances. However, you have mentioned that the DA is not taken into account while calculating the pension amount. Hence in your case such DA should not be included with the salary for the purposes of exemption of house rent allowance under Income Tax Law.
Top

 

labour law
by Praful R. Desai
No prejudice

Q: Is the order of the Tribunal setting aside the order of the disciplinary authority bad only on the ground that the Enquiry Officer was appointed by the original disciplinary authority and not by the ad hoc disciplinary authority appointed in respect of the present case?

A: The S.C. was dealing with this point in Asst. Supt. of Post Office v G. Mohan Nair (1999-II-LLJ-986).

The respondent at the material time was working as extra departmental delivery agent. With effect from 2-11-88, he was put off duty because of non-delivery of 11 money-orders, although he thereafter, voluntarily credited the amount of Rs 3,991/- in the Government account.

After the enquiry, he was imposed a punishment of removal from service. The Tribunal on challenge, set aside the order on the ground that the Enquiry Officer was not properly appointed.

In appeal, the SC, observed that there is no material to indicate that any prejudice was caused to the respondent as a result of the appointment of an Enquiry Officer and a Presenting Officer by the original disciplinary authority. It is not even alleged that any such prejudice was caused to the respondent.

The SC added that no allegation of any kind whether of bias or mela fides has been made against the Enquiry Officer or the Presenting Officer so appointed in the conduct of the enquiry. The actual order against the respondent has been by the ad hoc disciplinary authority after taking into account the report of the Enquiry Officer and the evidence led in the case.

In the absence of any prejudice or any allegations of mala fides, the enquiry should not have been set aside and the action of the disciplinary authority should not have been quashed only on the technical ground that instead of the ad hoc disciplinary authority, the actual disciplinary authority had appointed the Enquiry Officer in respect of the present case.

Consequently, the SC set aside the order of the Tribunal and allowed the appeal. Thus, upholding the order of punishment.Top

 

Sales tax
by A.K. Sachdeva

Q: We are engaged in the business of purchase and sale of karyana goods on wholesale basis being a dealer registered under the Punjab General Sales Tax Act, 1948 and the Central Sales Tax Act, 1956. Kindly let us know on what grounds and inspecting officer can proceed to seize the documents during the course of search & seizure at the place of business of a registered dealer? Also clarify to what extent the seized documents can be retained by the sales tax authorities after inspection and seizure? Further can the legality of these proceedings be questioned by the affected party if the officer carrying out search and seizure does not follow the statutory provisions?

— Som Nath Gupta, Ludhiana

A: The provisions contained in section 14 of the Punjab General Sales Tax Act, 1948 provide complete answers to the questions sought to be clarified by the queriest. Sub-section (3) of section 14 plainly lays down, inter alia, “If any officer referred to in sub-section (1) has reasonable ground for believing that any dealer is trying to evade liability for tax or other dues under this Act ....... he may seize such book account, register or document as may be necessary.” Therefore the only power for seizure of the document or other papers available to the prescribed authorities is “reasonable ground for believing that any dealer is trying to evade liability for tax or other dues under the Punjab General Sales Tax Act.” Unless this satisfaction is objectively arrived at by the inspecting Officer he cannot legally acquire jurisdiction to seize the documents etc. As far as period of retention of documents seized is concerned, as per clause (a) and clause (b) of sub-section (3) of section 14, documents relating to current period can be retained for ten days and in event of documents relating to some other periods the officer is entitled to retain the same for 60 days from the date of seizure. And if the officer exercising the powers of search and seizure does not strictly follow the statutory procedure as laid down in section 14 of the Act ibid, the aggrieved party can assail the legality of the proceedings by way of a writ petition under Article 226 of the Constitution of India in the High Court.

Q: We are engaged in the business of iron and steel goods, machinery, its parts and accessories in Punjab as a registered dealer both under the Local Act as well as the Central Act. During the assessment year 1996-97 we furnished the periodical returns to the assessing authority declaring the turnover relating to our business. Two transactions involving local sales could not be erroneously declared in the returns while appropriate entries in the books of account were made. At the time of assessment we explained these facts in writing before the assessing authority. However the assessing authority levied upon us penalty under sub-section (7) of section 10 of the Punjab General Sales Tax Act, 1948 for this unintentional mistake. The appeal against imposition of penalty is pending consideration before the appellate authority. Kindly advise if the assessing authority was right in taking recourse to penalty provisions?

— Anil Seth, Jalandhar

A: No penalty under sub-section (7) of section 10 can be levied simply because some transactions have not been declared in returns due to inadvertance. The fact that entries in question found place in the books of account of the dealer in proper manner has not been disputed and therefore mere omission to declare them in the returns does not give rise to enalty proceedings within the meaning of the aforesaid provisions of law. The assessing authority cannot therefore be said to have acted in accordance with the legal provisions as well as the principles of law laid down in this context by the Supreme Court in 28 STC 700.Top

 

Grape vine

Crash ahead

A VETERAN BSE broker warns of an impending crash ahead predicting that the fall will be precipitated by at least half a dozen brokers who have overextended their trading positions in the midst of the latest euphoria. He points out that the market is even more heavily overbought than in October, when a sharp crash took place. Beware!

Cadbury

Industry watchers predict that Cadbury which has re-invented its positioning in the Indian FMCG segment will be the company to watch for in Y2K. In a bid to take its rival Nestle head on, several new product launches have been planned for Y2K. Watch the action as it unfolds.

TV 18

Just like the IPOs of Hughes Software and Polaris Software Labs offered those who missed the bus in case of Infy and Satyam Computers a second chance in the IT segment, the whispers doing the round in corporate circles is that TV 18 is a mini Zee Telefilms in the making.Top

  H
 
  Website of past events
Tribune News Service
NEW DELHI, Dec 18 — A website dedicated to the events and personalities of the 20th century has been developed by Compare Infobase Pvt Ltd. The website, www.2000Fair.com, has information on events like World War, German unification, personalities like Mahatma Gandhi, Martin Luther King, Mother Teresa, invention of electricity to atomic bomb and the natural calamities that occurred during the 20th century.

Office-bearers
Tribune News Service
CHANDIGARH, Dec 18 — The following have been elected office-bearers of the Chamber of Chandigarh Industries. Mr A.L. Aggarwal — President; Rakesh Rattan Aggarwal — Vice-President; Naveen Manglani — Honorary Secretary; Sanjeev Singla — Finance Secretary and Anil Bhasin — Joint-Secretary.

Goodyear
Tribune News Service
LUDHIANA, Dec 18 — Goodyear India Ltd has opened its largest exclusive tyre centre with multi facilities — Wheels-n-Fun here. The centre offers services like engine scanning, engine tuning, upholstery cleaning, A/C servicing, rim straightening and pollution checks. In addition to it customer can enjoy a quick game of pool or surf on the Internet or even grab a quick bite at the cafe.

JK Tyres
Tribune News Service

NEW DELHI, Dec 18 — JK Tyre has introduced a new tyre, Ultima-XP, using the Radial technology. Developed at JK Tyre’s state-of-the-art R&D facility it, the tyre comes with a host of features like all terrain adaptability.
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